JR East buys Tokyu Car

[angusmclean]

Just reading the weekly Railway Gazette and noticed this news, previously announced on November 1 that the above will take place next April 1.

 

http://www.tokyu-car.co.jp/eng/index.html

 

http://www.railwaygazette.com/nc/news/single-view/view/jr-east-to-acquire-tokyu-car.html

 

Angus

[KenS]

Interesting. Either the car manufacturing business isn't profitable, or Tokyu's having revenue problems and needs cash.  The latter seems more likely since the article notes they're also divesting their "automotive and parking businesses".

 

I can see why JRE would leap at the opportunity.  With the number of cars they buy, bringing one of their major manufacturers in-house can only help.

[bikkuri bahn]

Interesting this has been covered rather sparsely by the press, perhaps the Olympus fiasco and the TPP hulabaloo is hogging the business headlines here.  

 

Anyway, this is likely a first step in the inevitable consolidation of rolling stock makers in Japan, who are trying to chase orders in a shrinking domestic market.  Tokyu is arguably one of the weaker makers (apparently they have been bleeding red ink recently)- though they have a good market in the Kanto area, they are weak elsewhere, and their international market successes are unimpressive- supplying mainly smaller orders of DMUs, a market segment with many European competitors.  Hitachi Rail and Kawasaki Heavy benefit from being part of big conglomerates, while Nippon Sharyo is owned by JR Central.  Makes you wonder how Kinki Sharyo fits in the picture, though they seem to have a good market niche in supplying overseas market LRVs.  Anyway, likely a smart move by JR East- they now have a builder under their umbrella that has HSR trainset and diesel railcar manufacturing capability, so they can be more aggressive in chasing foreign contracts.

[miyakoji]

About Kinki, Japanese wiki says that Kintetsu owns 49.7%, I wonder if JRW would like to buy a stake if they don't already own some.  But that plus overseas LRT sales doesn't guarantee anything.

 

Also, JRE's Niitsu facility can fabricate complete cars, can't it?  They restored C61 20 at Omiya, so that's got to be a pretty serious shop.  I wonder how much of their own manufacturing capacity JRE really needs, or at least, can they utilize this amount of manufacturing capacity to make it worth owning?